This paper analyzes the optimal production and hedging decisions of a competitive firm holding optimism and pessimism … on the output price distribution nor on the firm's preferences. Furthermore, the validity of the full-hedging theorem … the firm's optimism level above which it is never optimal for the firm to full-hedge even when an unbiased hedging …

This study investigates the effect of corporate hedging on stock price crash risk. We test two competing hypotheses …. Under the transparency hypothesis, hedging reduces a firm's information asymmetry and lowers crash risk. Under the opacity … hypothesis, hedging decreases financial reporting quality and increases crash risk. Using a comprehensive sample of firms from …

This research focuses on the ultimate impact of hedging effectiveness on firm performance. Successful risk management … quarterly earnings per share). We empirically estimate the hedging profile of 5,586 non-financial firms (spanning 25 industries … and other firm characteristics – identifies the impact of the firm's hedging profile on firm performance. We find a strong …

/Estrin 2004) together with the fact that almost all (92 %) of the world's top 500 companies enter derivatives markets for hedging …

This paper investigates the determinants of hedging strategy choice. We introduce different dynamic discrete choice … frameworks with random effects to mitigate unobserved heterogeneity and state dependence. Using a new dataset on the hedging … activities of 150 US oil and gas producers, we find strong evidence that hedging strategy is influenced by investment …

Cross hedging price risk in an incomplete financial market creates basis risk. We propose a new way of modeling basis … necessary and sufficient condition for underhedging in an unbiased market. Using the example of cross hedging jet fuel price … cross hedges differ significantly from those derived under the traditional additive cross hedging model …

-linked securities. It considers the trade-offs an insurer or reinsurer faces in selecting a hedging strategy. We compare index and … indemnity-based hedging as alternative design choices and ask which is capable of creating the greater value for shareholders … problem yields a conflict of interest between shareholders and other stakeholders. Given the fact that hedging may improve the …